negroes should be acknowledged, and instead of compulsory labor, contracts upon fair terms should be made between master and servants:

HEADQUATERS DEPT. OF THE TENNESSEE,
VICKSBURG, Miss., August 1st, 1868.

1. All regular organized bodies of the enemy having been driven from those parts of Kentucky and Tennessee west of the Tennessee River, and from all Mississippi west of the Mississippi Central Railroad, and it being to the interest of those districts not to invite the presence of armed bodies of men among them, it is announced that the most rigorous penalties will hereafter be inflicted upon the following class of prisoners, to wit: All irregular bodies of cavalry not mustered and paid by the Confederate authorities; all persons engaged in conscription, or in apprehending deserters, whether regular or irregular; all citizens encouraging or aiding the same; and all persons detected firing upon unarmed transports. It is not contemplated that this order shall affect the treatment due to prisoners of war captured within the districts named, when they are members of legally organized companies, and when their acts are in accordance with the usages of civilized warfare.

2. The citizens of Mississippi within the limits above described are called upon to pursue their peaceful avocations, in obedience to the laws of the United States. Whilst doing so in good faith, all United States forces are prohibited from molesting them in any way. It is earnestly recommended that the freedom of negroes be acknowledged, and that instead of compulsory labor contracts upon fair terms be entered into between the former masters and servants, or between the latter and such other persons as may be willing to give them employment. Such a system as this, honestly followed, will result in substantial advantages to all parties.

All private property will be respected except when the use of it is necessary for the Government, in which case it must be taken under the direction of a corps commander, and by a proper detail under charge of a

commissioned officer, with specific instructions to seize certain property and no other. A staff officer of the quartermaster or subsistence department will, in each instance, be designated to receipt for such property as may be seized, the property to be paid for at the end of the war on proof of loyalty, or on proper adjustment of the claim, under such regulations or laws as may hereafter be established. All property seized under this order must be taken up on returns by the officer giving receipts, and disposed of in accordance with existing regulations.

*

4. Within the county of Warren, laid waste by the long presence of contending armies, the following rules to prevent suffering will be observed: Maj-Gen. Sherman, commanding the Fifteenth army corps, and Maj.Gen McPherson, commanding the Seventeenth army corps, will each designate a commissary of subsistence, who will issue articles of prime necesity to all destitute families calling for them, under such restrictions for the protection of the Government as they deem necessary. Families who are able to pay for the provisions drawn will, in all cases, be required to do so.

On the march of Gen. Sherman from Eastport, Miss., where his army abandoned the Memphis and Charleston Railroad, to reënforce Gen. Grant at Chattanooga, his force was subsisted on the route.

A very limited amount of supplies was brought by wagons, but the whole country for miles on either flank was stripped of every article of food and every pound of forage. The citizens were sorely pressed, but the safety and sustenance of armies were balanced against this fact, and decided in favor of the latter. All animals capable of carrying a soldier, his gun and blanket, were pressed into the service, and almost the whole command consequently arrived mounted.

THE progress of civil affairs is too important to be overlooked. The year 1863 did not exhibit much advance in a commercial point of view. The expectations that had been entertained of an immediate renewal of trade as a necessary consequence of the opening of the Mississippi, and the continued occupation of the Atlantic coast of South and North Carolina, and the penetration of the troops into the Texan country, were not realized; and the foreign commerce of the country was greatly contracted in face of the improved harvests in Europe. These have enabled the people to dispense with much of the breadstuffs and provisions which were the main staples of the national export.

Extensive regulations were adopted by the Government of the United States relative to trade with the inhabitants within the lines of

the army in the insurrectionary States. The results, however, were very limited.

In the insurrectionary States the currency exerted a most unfavorable influence on their internal affairs, and very seriously diminished the hopes of the people of ultimate success in the war.

At the commencement of hostilities, the impression was universal that the war would be short. The most distinguished politicians, the wisest commercial men and capitalists of all classes, indeed every household, acted upon this view. Hence, every one was soon embarrassed for the want of hundreds of small articles, which might have been procured at cheap rates if the parties had been able to look only a few months into the future. This same short-sightedness controlled the financial affairs of the

if adhered to, would result in the destruction of the army from a lack of supplies, and the starvation of the people who were engaged in other industrial pursuits in towns and cities. In anticipation of this danger, an act was passed by Congress in the beginning of the year, which authorized the Government to seize or impress all the produce necessary for the army. It provided that a board of commissioners should be appointed in each State, who should determine, every sixty days, the prices which the Government should pay for each article of produce impressed within the State. A central board of commissioners was also appointed for all the States. The act authorized the agents of the Government to seize all the produce of the farmer, except so much as was necessary to maintain himself and family. For this produce the agent paid at the rate fixed by the State commissioners. The operation of the act created an unparalleled excitement among the people.

The embarrassment which arose from this state of affairs was greatly increased by the decay of the railroads. The means of transportation possessed in the Southern States became more and more limited during each year of the war. In Virginia the railroads were on the point of giving out at the beginning of 1863. Their rate of speed was reduced to ten miles an hour as a maximum, and their tonnage diminished from twenty-five to fifty per cent. This change in the rate of speed and quantity of freight was made through necessity. The wood work of the roads had rotted, and the machinery was worn out, and owing to the stringent enforcement of the conscription law among the men employed by the railroad companies, they had not been able, with all their efforts, to renew the one or repair the other. This failure extended to the roads in all the States. The scarcity of iron for rails was another serious injury, which could not be repaired. In this respect, the pressure of the blockade was more severely felt than in any other. So completely were these roads a part of the military system, that serious apprehensions existed that the armies might be obliged to fall back from some of their positions in consequence of the difficulty of getting to them food for men and horses. The country in the vicinity of the armies, had been stripped of its provisions and forage, and they depended for their existence and the maintenance of their positions upon the railroads. The better the roads were, the more certain were the supplies of the troops and their ability to resist all the efforts of the Federal army to occupy the country.

In two instances the Government made roads, to complete the internal system, where gaps existed. From Selma, in Alabama, to Meridien, in Mississippi, a link was built which completed this great highway from west to east, and superseded the necessity of a long detour by Mobile, and rendered useless any attempt by the forces at Pensacola to cut off communica

tion by destroying the railroad which connects Montgomery with Mobile. The other instance was the line, of fifty miles in length, between Danville, in Virginia, and Greensborough, in North Carolina. By this work the Government was relieved from a dependence upon the line of railroad which runs from Richmond through Petersburg and Weldon, and which has for years been the great highway between the North and the South.

But while the armies were exposed to want, from the probable inability of the roads to transport sufficient provisions, the situation of the inhabitants in some parts of the Confederacy was equally critical, from the same cause. The northern part of Virginia, the fruitful valley of the Shenandoah, and the eastern section of North Carolina, produced in ordinary times most of the grain which supplied bread to the South, and which was exported to South America. Each of these districts was now in possession of the Federal forces. In Middle Tennessee agriculture was suspended, and the aged men, women, and children who adhered to the Confederacy, were forced to retire still farther south and increase the number of mouths to be fed there. Another source of supply, the North Carolina fisheries, which annually yielded millions of herring, besides shad to be salted, was also cut off. The wheat crop of 1862 was an unusually poor one; and al though a sufficiency of grain for the year's sup ply of food was grown, the limited means of transportation possessed by the Confederacy were taxed to the utmost to bring this grain from the remote corners of States to the spots where it was demanded for consumption-to bring the food and the mouths together. Such was the aspect relative to provisions, in the beginning of the year. It was evident that a great change must be made in the production to enable the country to surmount these evils. The Government, foreseeing the danger, made vigorous appeals to the people.

These were followed by appeals from the gov ernors of several States to their citizens, and by resolutions of legislative bodies. A very extensive effort was also made to secure the planting of more wheat and corn.

The crops during the summer were represented to be good, but as the latter part of the year approached, the apprehensions of a scarcity were manifest. It was said, "the coming winter will be one of unusual trials." In October the following facts occurred at Richmond. One firm sent one hundred barrels of flour to be sold at $27, while the price in the stores was from $65 to $75, and promised to the city all the flour on hand and all the tolls they might receive at Government prices. Another firm offered to sell all the flour sent for consumers without any charge for commissions. Another offered to grind all the wheat purchased by the city, at the cost of labor. The city of Richmond established a Board of Supply to purchase articles of necessity to be sold to the poor at cost.

the service. At noon, on the 3d, she started down James River, hoisting and bearing a flag of truce after passing City Point. The next day (the 4th) at about one o'clock, P. M., when within a few miles of Newport News, we were met by a small boat of the enemy, carrying two guns, which also raised a white flag before approaching us. The officer in command informed Lieut. Davidson that he had orders from Admiral Lee,

on board the United States flagship Minnesota, lying below, and then in view, not to allow any boat or vessel to pass the point near which he was stationed without his permission. By this officer I sent to Admiral Lee a note stating my objects and wishes, a copy of which is hereto annexed, marked A. I also sent to the admiral, to be forwarded, another in the same language addressed to the officer in command of the United States forces at Fort Monroe. The gunboat proceeded immediately to the Minnesota with these despatches, while the Torpedo remain ed at anchor. Between 3 and 4 o'clock, P.M., another boat came up to us, bearing the admiral's answer, which is hereunto annexed, marked B.

We remained at or about this point in the river until the 6th inst., when, having heard nothing further from the admiral, at 12 o'clock м., on that day, I directed Lieut. Davidson again to speak the gunboat on guard, and to hand to the officer on board another note to his admiral. This was done. A copy of the note is appended, marked C. At half-past 2 o'clock P. M., two boats approached us from below, one bearing an answer from the admiral to my note to him of the 4th. This answer is annexed, marked D. The other boat bore the answer of Lieut. Col. W. H. Ludlow to my note of the 4th, addressed to the of ficer in command at Fort Monroe. A copy of this is annexed, marked E. Lieut.-Col. Ludlow also came up in person in the boat that brought his answer to me, and conferred with Col. Ould, on board the Torpedo, upon some matters he desired to see him about in connection with the exchange of prisoners. From 'the papers appended, embracing the correspondence referred to, it will be seen that the mission failed from the refusal of the enemy to receive or entertain it, holding the proposition for such a conference "inadmissible."

The influences and views that led to this determination after so long a consideration of the subject, must be left to conjecture. The reason assigned for the refusal of the United States Secretary of War, to wit: that "the customary agents and channels" are considered adequate for all needful military communications and conferences," to one acquainted with the facts, seems not only unsatisfactory but very singular and unaccountable; for it is certainly known to him that these very agents, to whom he evidently alludes, heretofore agreed upon in a former conference in reference to the exchange of prisoners (one of the subjects embraced in your letter to me), are now, and have been for some time, distinctly at issue on several important points. The existing cartel, owing to these disagreements, is virtually sus pended, so far as the exchange of officers on either side is concerned. Notices of retaliation have been given on both sides.

The effort, therefore, for the very many and cogent reasons set forth in your letter of instructions to me, to see if these differences could not be removed, and if a clear understanding between the parties as to the general conduct of the war could not be arrived at before this extreme measure should be resorted to by either party, was no less in accordance with the dictates of humanity than in strict conformity with the usages of belligerents in modern times. Deeply impressed as I was with these views and feelings, in undertaking the mission, and asking the conference, I can but express my profound regret at the result of the effort made to obtain it; and I can but entertain the belief that, if the conference sought had been granted, mutual good could have been effected by it; and if this war, so unnatural, so unjust, so unchris

tian, and so inconsistent with every fundamental principle of American constitutional liberty, "must needs" continue to be waged against us, that at least some of its severer horrors, which now so eminently threaten, might have been avoided. Very respectfully,

ALEXANDER H. STEPHENS. exhibited by the Confederate Government, or During the year no signs of yielding up were by the Governments of any of the seceded States. On the question of submission to the Federal Government, no organized body manifested any assent, but on the contrary the most determined opposition. The Federal Government, on the other hand, continued steadfast and onward in the policy it had adopted. The views of President Lincoln on the state of the country are thus given in his message to Congress, Dec. 8th, 1863:

When Congress assembled a year ago, the war had already lasted nearly twenty months, and there had been many conflicts on both land and sea, with vary. ing results. The rebellion had been pressed back into reduced limits; yet the tone of public feeling and opinion, at home and abroad, was not satisfac tory. With other signs, the popular elections, then just past, indicated uneasiness among ourselves, while, amid much that was cold and menacing, the kindest words coming from Europe were uttered in accents of pity that we were too blind to surrender a hopeless cause. Our commerce was suffering great. ly by a few armed vessels built upon and furnished from foreign shores, and we were threatened with such additions from the same quarter as would sweep our trade from the sea and raise our blockade. We had failed to elicit from European Governments any thing hopeful upon this subject. The preliminary Emancipation Proclamation, issued in September, was running its assigned period to the beginning of the new year. A month later the final proclamation came, including the announcement that colored men of suitable condition would be received into the war service. The policy of emancipation and of employ ing black soldiers gave to the future a new aspect, about which hope, and fear, and doubt contended in uncertain conflict. According to our political system, as a matter of civil administration, the General Government had no lawful power to effect emancipation in any State, and for a long time it had been hoped that the rebellion could be suppressed without resorting to it as a military measure. It was all the while deemed possible that the necessity for it might come, and that, if it should, the crisis of the contest would then be presented. It came, and, as we anticipated, it was followed by dark and doubtful days.

Eleven months having now passed, we are permitted to take another review. The rebel hordes are pressed still farther back, and, by the complete opening of the Mississippi, the country dominated by the rebellion is divided into distinct parts; with no practical communication between them, Tennessee and Arkansas have been substantially cleared of insurgent control, and influential citizens in each, owners of slaves and advocates of slavery at the beginning of the rebellion, now declare openly for emancipation in their respective States. Of those States not included in the emancipation proclamation, Maryland and Missouri, neither of which, three years ago, would tolerate any restraint upon the extension of slavery into new Territories, only dispute now as to the best mode of removing it within their own limits. Of those who were slaves at the beginning of the rebellion, full one hundred thousand are now in the United States military service, about one-half of which number actually bear arms in the ranks; thus giving the double advantage of taking so much labor from the insurgent cause, and supplying the places